Can Your Budget Stretch to Change?
The need for change within an organisation is often laid out and agreed upon but it will bring the desired results if the change is planned, managed and implemented well. But it is a project that needs to be resourced adequately. In other words, are the benefits of change worth the money you are about to spend on it?
Cost-benefit analysis
A term that most businesses will be familiar with and one that is covered in some detail in change management training for project managers. This type of analysis essentially answers the question of whether everything that is planned to implement a new way of doing things is worth it from a financial viewpoint. Will the cost of change be reflected in the return on investment?
What are the costs associated with change management?
Quite often, there can be a reluctance to invest and commit to a change project simply because there are so many unknowns. No organisation wants to or can afford to ‘waste’ money on a project that either doesn’t or can’t deliver.
Understanding the costs associated with change management is critical, and something that an organisational change management specialist will help determine.
As well as time, energy and resources, a change management project will also come with costs including:
- Change management resource costs, such as hiring an organisational change management specialist
- Training and staff development costs
- Communication costs
- Travel costs too
- Cost in terms of staff time dedicated to the project
- Change management materials costs
- The cost of hosting events such as ‘lunch & learn’, roadshows and so on
- General expenses
When there is a reluctance to commit, an organisational change management specialist will look to ‘tip the scales’ by showing the cost-benefit analysis – in other words, how much the benefits of making the change will outweigh the cost of implementing.
The different faces of cost-benefit analyses
There are different means by which cost-benefit analysis can be presented including:
- Speed of adaptation – with a fully formed plan and risks minimised, a change management project that can be utilised with speed will present significant returns.
- Avoiding costs – remaining with the status quo is costing money and so change management is a cost-avoidance tactic.
- Risk – again, maintaining the status quo presents an unacceptable risk to the company. In this case, change management becomes a risk-mitigating solution.
- Value – change is ‘as good as a rest’ and by introducing new ways of doing things, people can feel invigorated to be more productive.
- Effective – good management of change projects is key to their success. By resourcing the project properly, the potential to grow and succeed is increased.
Can you afford NOT to make changes?
Perhaps the question should be flipped onto its head – can you afford not to stretch your budget to plan and implement a change or changes that could bring rewards and benefits for your organisation?
At the same time, you need to consider the impact of a poorly managed project would do your company and how this can be avoided.
